The US Court of Appeals for the Ninth Circuit on May 22 denied stays for both Kalshi and Polymarket, clearing the way for state-level gambling enforcement actions in Nevada and Washington to move forward.
The court rejected the platforms' claims of irreparable harm and found no strong likelihood of success on their federal preemption arguments.
Nevada filed a civil enforcement action against Kalshi in February 2026, arguing its sports-related contracts fall under state gaming rules. Polymarket faced similar action from Nevada in January 2026, after ceasing operations in late 2025. Washington's Attorney General Nick Brown sued Kalshi in late March 2026 for alleged anti-gambling law violations.
At least nine other states have issued cease-and-desist letters or filed lawsuits. Arizona has pursued criminal charges.
Kalshi and Polymarket argued their contracts are CFTC-supervised derivatives, preempting state laws. State regulators view sports event contracts as sports betting, regulated locally.
With stays denied, both platforms must now defend active state court proceedings while pursuing appeals. If states assert jurisdiction, platforms face potential licensing in Nevada, contract bans in Washington, and criminal exposure in Arizona, disrupting market access and likely curbing sports-related contract offerings.